Will your legal planning will really protect your business and wealth?
Does your current estate planning fully protect your family?
Scottsdale Asset Protection attorney Ike Devji on how every successful Arizona resident can crisis test their planning today.
For business owners, entrepreneurs and professionals like physicians, personal and business legal planning must address all the unique complexities your profession, finances and family demand.
This self-exam may make you reconsider how “ready” you, your business, and your family really are for some common future problems and events, whether related to the current Coronavirus crisis or any other.
Following are some of the most predictable and widely applicable risks and planning issues. Use this as a starting point but always enlist experienced help to account for your unique fact pattern. Every one of theses issues, once resolved makes your future more predictable and prosperous.
Crisis Test Your Asset Protection Planning: What Would Happen If…?
1. Do you have a personal liability umbrella insurance policy of at least $1 million?
2. Are your assets adequately protected from a professional or personal liability exposure that is either uncovered by insurance or that might produce a verdict/liability significantly above your insurance limits?
3. Are you financially prepared for an event or a disability that would not allow you to practice your profession any longer?
4. If you own your own business or professional practice, how long would your practice be able to pay all its fixed expenses (like rent, salaries, insurance, etc.) without you personally producing income or going into your personal savings?
5. Do you have a key employee or business partner that produces an amount of income that is vital to the operation and solvency of your business?
6. Are you adequately prepared and insured for the loss or disability of that individual?
7. Is your practice properly “papered” with the right legal structure and specifics like custom employment manuals, physical and IT security, all the right kinds of insurance on issues like employee lawsuit claims and data breaches, and other required business planning?
8. If you have partners in your business or medical practice, do you have a buy-sell agreement that is all of the following:
a. Has an up-to-date, professional valuation of your business or professional practice
b. Adequately funded with all the appropriate life, disability, and other insurance required to cover every partner's family
c. Covers the “five-D's”: death, disability, disqualification, departure, or divorce of any partner
9. Are there risks in your life you are aware of and have been avoiding addressing for any reason, such as a family member, partner, or employee with a behavioral or compliance issue or even some physical safety issue at your business or on your property? It's amazing how many clients say, “I was always worried that this would happen…” after a crisis occurs.
Crisis Test Your Estate Planning: What Happens If You're Not Here?
1. Do you actually have an estate plan like a Revocable Living Trust or at bare minimum, a will?
2. If you do, does your family know about it, is it up-to-date, and are you comfortable with your instructions and the people you have left in charge as guardians and trustees?
3. Will assets you leave behind be adequately protected for your heirs from both your and their known and unknown future creditors and liability?
4. Has your spouse (or other heirs) been adequately included in your relationship with your legal, tax, and investment advisors and are those relationships good enough to provide the ongoing guidance your family will need?
5. Do your children have adequate financial discipline and education to handle and best use what you are leaving behind for them?
6. If not, or if they are minors, are your comfortable with the skill and commitment of the guardians and advisors that your estate plan names?
7. Is the amount of wealth your family would be left with tomorrow adequate to provide the income and stability for them to have and do everything you are working to provide?
Finally, is there something that you have always wanted to do for yourself or for those you love? Think about how to make that happen sooner rather than later. There is usually no perfect “someday” and advisors see too many successful people put those things off for a day that fate may decide will never come.